Melbourne

Docklands nears 20% of Melbourne’s Prime Market

2012-08-21T05:00:00Z

MELBOURNE, 8 August 2012 - The Docklands precinct is now larger than Melbourne’s Eastern Core and is the second largest office precinct for prime grade stock in the Melbourne CBD. According to Jones Lang LaSalle Research, Melbourne’s CBD office market is 4.27 million square meters of which 2.44 million square meters are prime grade.

In context, the 437,100 sqm of prime grade stock in the Docklands precinct is more than all of Adelaide’s prime grade stock. The growth of the precinct has been rapid over the past decade and has shifted the geographical heart of Melbourne CBD, to the west.

Jones Lang LaSalle’s Victorian Managing Director Andrew Wood said “all major international cities have different precincts with their own feel. Docklands will never have the laneway vibe of the CBD’s core precinct, or the retail appeal of the Paris-end of Collins Street; however Docklands offers a harbour feel around its campus office and residential areas, plus entertainment and connections not available to the CBD grid. These are of significant appeal to many major corporates.”

The Docklands office precinct has been embraced by a number of national and multinational tenants including domestic banks (ANZ, NAB, Bendigo & Adelaide Bank), finance groups (AXA, Medibank), media and communications firms (Fairfax, Channel 9, NBN), public sector tenants (ATO and Melbourne Water) and a range of other business services groups.

Mr Wood said “Docklands has been fully endorsed by the investment market which is the ultimate test. So not only is there high demand from major tenants for high quality campus style accommodation, there has been strong investment in the Docklands precinct from domestic and international funds. Both local and offshore institutional investors continue to be attracted to the high quality, long WALE assets in Docklands.”

This cycle is likely to continue with the bulk of new development in the CBD currently concentrated in the Docklands precinct. With the completion of these developments currently under construction, the prime office market in the Docklands precinct is expected to grow to around 626,000 sqm in mid-2014, approximately 24% of CBD prime grade buildings.

There is now only limited prime development sites left available in Docklands, forcing new developments such as 150 and 171 Collins Street back to the grid.“Docklands continues to integrate with the traditional CBD grid which will take a further step when Collins Square is completed in 2013 and its street activation takes shape” Mr Wood concluded.